The correlation between the price of bitcoin and the S&P 500 remains high.
Morgan Stanley believes that the stock market on Wall Street may expect a short-term rally in the near future, when the S&P 500 will be able to show growth of 16%, which partially compensates for losses from the beginning of the year. Such a rally, as experts believe, could happen if the U.S. is not recorded an official recession.
Meanwhile, given that the correlation between the price of bitcoin and the S&P 500 remains high, the probability growth of the No. 1 cryptocurrency’s value increases. Currently, bitcoin price has gone below the values of the dynamic average of the last 200 days ($23,000), which means the situation of oversold of this asset.
Morgan Stanley also believes that there is a high probability that inflation in the U.S. economy has peaked. This will mean that in early November, the U.S. Federal Reserve may take a weaker step in raising the rate and instead of its fourth increase of 0.75% will raise the interest rate by only 0.5%. This would mean that monetary policy tightening would weaken and financial markets would not experience the same reduction in liquidity inflows that they have experienced since the beginning of this year.
Notably, former Morgan Stanley CEO John Mack also spoke on the issue of cryptocurrencies. In an interview with CNBC’s Squawk Voh program, he said that he was looking to the future and thought that “maybe in fifty years, these assets will be an important point of money transactions,” noting the convenience in financial communications that is already evident with the advent of cryptocurrencies.
Mack revealed that he is related to a company that was created by another man that invests in bitcoins, among other things, which is how the former Morgan Stanley CEO answered the question of whether he currently owns bitcoins.